Correlation Between WinVest Acquisition and Deutsche Bank

Can any of the company-specific risk be diversified away by investing in both WinVest Acquisition and Deutsche Bank at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining WinVest Acquisition and Deutsche Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between WinVest Acquisition Corp and Deutsche Bank AG, you can compare the effects of market volatilities on WinVest Acquisition and Deutsche Bank and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in WinVest Acquisition with a short position of Deutsche Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of WinVest Acquisition and Deutsche Bank.

Diversification Opportunities for WinVest Acquisition and Deutsche Bank

0.04

Correlation Coefficient

WinVest Acquisition  Deutsche Bank

Significant diversification

The 3 months correlation between WinVest and Deutsche is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding WinVest Acquisition Corp and Deutsche Bank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Bank AG and WinVest Acquisition is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on WinVest Acquisition Corp are associated (or correlated) with Deutsche Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Bank AG has no effect on the direction of WinVest Acquisition i.e., WinVest Acquisition and Deutsche Bank go up and down completely randomly.

Pair Corralation between WinVest Acquisition and Deutsche Bank

Given the investment horizon of 90 days WinVest Acquisition is expected to generate 1.26 times less return on investment than Deutsche Bank. In addition to that, WinVest Acquisition is 1.53 times more volatile than Deutsche Bank AG. It trades about 0.12 of its total potential returns per unit of risk. Deutsche Bank AG is currently generating about 0.22 per unit of volatility. If you would invest  1,712  in Deutsche Bank AG on December 28, 2024 and sell it today you would earn a total of  684.00  from holding Deutsche Bank AG or generate 39.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	93.44%
Values	Daily Returns

WinVest Acquisition Corp  vs.  Deutsche Bank AG

WinVest Acquisition Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in WinVest Acquisition Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, WinVest Acquisition showed solid returns over the last few months and may actually be approaching a breakup point.

Deutsche Bank AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Bank AG are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Deutsche Bank sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WinVest Acquisition and Deutsche Bank

The main advantage of trading using opposite WinVest Acquisition and Deutsche Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WinVest Acquisition position performs unexpectedly, Deutsche Bank can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Deutsche Bank will offset losses from the drop in Deutsche Bank's long position.

The idea behind WinVest Acquisition Corp and Deutsche Bank AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.